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This chapter provides an overview of macroeconomics, which is the study of the economy as a whole. We first discuss what macroeconomics is about. Then we describe how different types of economies (market economy, planned economy, and mixed economy) work to solve economic problems in human society. Then we discuss how economic modeling helps to understand economic phenomena. Finally, the chapter provides a brief history of macroeconomic thought.
This chapter introduces students to computable general equilibrium (CGE) models, a class of economic model that describes an economy as a whole and the interactions among its parts. The basic structure of a CGE model and its database are described. We introduce a “standard” CGE model and provide a survey of CGE model applications.
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